Inside Asian Gaming

May 2011 | INSIDE ASIAN GAMING 45 Online Gaming C an a government be charged with war crimes, if the war is only one of intimidation? The U.S. federal Department of Justice isn’t blowing up buses. No one has died. But while Palestinian terrorists can only close down Israeli pizza parlors; the DoJ stopped online poker sites from doing business anywhere in the world—including where poker is 100% legal. On Friday, April 15, 2011, the DoJ seized the .com names of five of the biggest poker sites. It is not even clear that online poker is illegal in every state and territory of the U.S. But players in countries like England, where it is indisputably legal, also found themselves unable to access their favorite sites. This is a door the U.S. should never have opened. The next to step through couldbe an Islamic country, which outlaws alcohol, seizing the worldwide domain names of every retailer and restaurant that advertises beer or wine. And the DoJ also effectively froze the money deposited by hundreds of thousands of American players, who had done nothing wrong. There is no federal law against merely playing poker. Half the states do have mostly ancient laws on the books making it a crime, sometimes, to make a bet. But in the other half, it is not a crime to even bet with an illegal operation. This is true of New York, where the DoJ’s legal actions were filed. The criminal indictments charged the online operators under a statute, 18 U.S.C. §1955, which makes it a federal felony to be a large business in violation of state anti- gambling laws. The only state laws cited are New York’s Penal Law 225 and 225.05, which clearly do not apply to mere poker players. Black Friday saw widespread panic amongplayers, and the threat of aworldwide bank run on online gaming operators. By Wednesday, the DoJ appeared to realize it had way overstepped its power, and that it is losing the public relations war. On April 20, Preet Bharara, the U.S. Attorney in Manhattan who had seized the domain names, announced that an agreementhadbeenreachedwithPokerStars and Full Tilt Poker. Technically, the .com names remain seized. But the DoJ will now permit the companies to operate money games outside of the U.S., which they always had the legal right to do anyway. American players can also go to the .com sites and get their deposits back. This is a door the U.S. should never have opened. The next to step through could be an Islamic country, which outlaws alcohol, seizing the worldwide domain names of every retailer and restaurant that advertises beer or wine. Bharara issued the following statement: “No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player’s deposited funds.” Technically true, but misleading. Exactly how were players supposed to get their money, when they could not log on to the seized .com sites? Did Bharara tell the operators they could refund players’ deposits, and how they were suppose to do that? Even today the DoJ has not worked out all the details on what it will allow. Notice that the announced agreement is only with PokerStars and Full-Tilt. Those companies have licenses and approvals by foreign jurisdictions, including France, Italy and Alderney, which they want to protect. They also would like to someday return to the U.S., once the laws are changed. Absolute is licensed by the Kahnawake tribe in Canada and has always taken the position that it does not have to be overly concerned with the laws of Canada, the U.S., or any other jurisdiction. So it is standing tough. In fact, it is still accepting money players from the U.S. Winners and losers: Traffic on the seized sites seems to be down, but not precipitously. Americans must have quickly discovered that they can sign up to the same operators through .eu and .uk sites. Hit as hard have been media outlets Black Friday: A Step Too Far